Culture eats strategy for what?

Peter Drucker never said “Culture eats strategy for lunch.”

Culture eats strategy
I was at a conference recently and the keynote speaker used the “Culture eats strategy for lunch” quote, citing Peter Drucker, to make an assertion about the strength of his organization’s culture. The point was effective, but the implications of the misattributed quote are worth digging into.

Let’s start by defining culture and strategy separately and then look at the relationship between the two.

What is culture in an organization?

I see culture as the norms of an organization. These are either “understood,” having been learned by the members of the organization through example, observation, trial and error, or apprenticeship; or they are explicitly stated and encapsulated in a set of core values. Tronvig Group, in its work with clients, actively moves organizations from the (much more common) former state into the latter state. Explicitly codified values allow an organization to more effectively hire for fit and also be more consistent in the application of rules and practices that connect with the organizational strategy.

Why is culture important?

Does culture need to be worked down into every pore of the organization?

Ben Jenkins, one of our analysts, recently got into a discussion over drinks with the CEO of a very well-branded global retail company and broached this topic with him. Ben posed this question: “Does culture need to be worked down into every pore of the organization?” In this company’s case, into the behaviors of every retail associate? The answer was unhesitating: “Absolutely!” No matter how hard or expensive that is. They are the frontline of the company’s brand. They deliver on the brand experience at the tactical human-level interface. For a retail company like this one, it means that it has to be worked into the behavior of every one of its thousands of sales associates worldwide. It is vitally important that any company or organization get this right—that they make it as natural as breathing for every frontline employee.

What is strategy?

The broadest definition of strategy for business and organizational behavior is the alignment of market positioning with operational practice. (See Michael Porter.) It can also be defined as the intelligent selection of the most effective means to achieve your desired ends. This means that strategy is also an abandonment of other means that will not be pursued. Strategy involves difficult choices and requires great discipline to execute.

Why is strategy important?

Strategy is important because the combination of market position and operational practice protects you from competitive encroachment and weakens “me too” brands. In a perpetually competitive environment, your success is always dependent on your ability to create and keep a customer. (See the real Drucker.) Strategy is the activation of your best thinking on how to do that. Not only must you do things right in the minds of your customers, but you must also do the right things in the context of your marketplace. Without a well-thought-out strategy, the odds of this happening are slim.

What is the relationship between culture and strategy?

Because effective strategy must be carried through to tactical execution by all employees, a strategy that is incongruent with culture is destined for failure. This is not to say that it is impossible to align culture to strategy, but it is extraordinarily difficult to do so. It is far easier to execute a strategy that conforms to the existing culture. But strategy, in order to be effective, must spring from a real market opportunity. If there is none, then as difficult as it is, the culture must change.

The basic meaning of the phrase “culture eats strategy for lunch”—whoever said it—is that it is easier to reset strategy than it is to reset culture.

The basic meaning of the phrase “culture eats strategy for lunch”—whoever said it—is that it is easier to reset strategy than it is to reset culture. This is true, but strategy must actually come first and serve as the guide because if an organization’s culture were always allowed to dictate strategy (as is usually the case), then failure could be the unintended result.

Does anyone remember People’s Express Airline? Culture ate strategy … resulting in food poisoning and untimely death.

Another well-documented example is the Firestone Tire & Rubber company. For much of its illustrious history, Firestone was the best-managed company in the tire industry. It boasted a strong family culture based on ideas from the founder that served the company well for decades. Until it didn’t. The very culture that had made Firestone great ultimately hastened its demise in the face of technological innovations introduced by Michelin, a pesky foreign competitor. This has been written about by Professor Donald Sull in his Harvard Business Review article. The end result of Firestone’s reliance on culture above strategy was commercial disaster and ultimate acquisition by the Japanese tire maker Bridgestone.

How should an organization integrate strategy and culture?

We believe that culture should be assessed and clarified. Strategy should also be set and compared with the cultural bearings of an organization. Is there natural congruence? Or is there a conflict that needs to be resolved, as painful as that will be? If culture and strategy are aligned, the strategy can be carried forward. If they are not, then either the strategy needs to be reassessed or the culture needs to be actively and painstakingly brought in line with the strategy. Failure to do this will reduce the strategy to a baseless assertion. That’s the eating for lunch part. Without the cultural foundation for the strategy to build upon, the strategy will not get the support it needs from the system, from operational practice.

Only when culture and strategy are aligned can the strategy be carried forward.

As an illustration of this, it is interesting to go back to the above-cited article by Professor Sull. It was written in 1999 and he uses Apple as an example of a company that has lost its way. They had made strategic mistakes that also “disinvigorated” their culture—until, as we know from subsequent history, Steve Jobs came back through the purchase of Next and was able to reassert the company’s innovation and market-driven culture. Only by realigning the company culturally and strategically was it able to turn itself around and become the dominant force that we know today.

How do I get this sorted out?

We are helping our clients understand their culture, their customer, and their competition so that they can effectively carry forward their organizational or business mission.

Culture is comparatively easy to ascertain. We use our Brand Pyramid. This effective and relatively expedient tool helps codify an organization’s culture. Once the elements of the Brand Pyramid are agreed upon, it is possible to move on to the harder work of setting a viable strategy and acting on it. To do this, an organization must deeply understand not just its own culture but also its customer and its competition. Crucially, it must examine its offer and its competitors’ offers from the customer’s perspective. This is our essential work. We are helping our clients understand their culture, their customer, and their competition so that they can effectively carry forward their organizational or business mission. The greatest measure of an organization’s success is the effect it is able to have in the world. Without cultural and strategic alignment, the effect an organization could have will not be realized. Alignment is therefore directly tied to success.

How do I know Peter Drucker never said this?

How do I know Peter Drucker never said “Culture eats strategy for lunch”? I do not know with 100% certainty, but it makes little sense for him to have said it. First of all, it’s not in any of his 38 books. Second, it does not fit with the style of his writing or his manner of speech. He was not given to this kind of pithy aphorism. Finally and most importantly, it does not make a whole lot of sense because Mr. Drucker never lost sight of the need to do the right things—or, put another way, the need to act on strategy.

So does culture eat strategy for lunch? Not really. But will a misaligned culture eat up your strategic efforts? Probably. Does it make sense to pay careful attention to an organization’s culture and not just its business strategy? Absolutely!

Culture is important. Strategy is important. Lunch is important. Let’s work it out so we can find the time for all three.

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